U.S. Base Salary Increases for Healthcare Employees in 2011 Lag Other
Industries, New Hay Group Survey Finds

January 10, 2011 11:58 AM Eastern Time

PHILADELPHIA--(EON: Enhanced Online News)--U.S. healthcare employees can expect an average base salary increase of
2.6 percent in 2011, according to a new Hay
Group survey released today. That’s up from base salary increases of
2.3 percent reported in 2010 and slightly below increases of 2.8 percent
reported across all industries for 2011.

“Healthcare providers have felt the pinch, but salary budgets are
beginning to move upward, mirroring the slow ascent we are seeing in the
broader economy”

“The healthcare industry did not see salary budgets fall until 2009,
while other industries felt the effects of the recession much sooner,
lowering salary budgets as early as 2007,” said Ron Seifert, vice
president and executive compensation practice leader for Hay Group’s
healthcare practice. “So, while healthcare is still 0.2 percent behind
other industries, it seems to be rebounding at a faster pace after
taking a deeper dip in a much shorter timeframe.”

According to Hay Group’s survey, 18 percent of respondents across all
industries reported that they will maintain a salary freeze across all
levels in 2011 to reduce compensation costs, while only 4 percent of
respondents in healthcare reported an across-the-board freeze on
salaries.

“Healthcare providers have felt the pinch, but salary budgets are
beginning to move upward, mirroring the slow ascent we are seeing in the
broader economy,” added Seifert. “Interestingly, healthcare salary
trends are also starting to track those of other industries, which we
haven’t seen for at least a decade.”

Fewer healthcare executives will see their salaries frozen in 2011, with
8 percent of organizations reporting a freeze of executive pay. That’s
compared to just over 20 percent of organizations that reported freezing
executive pay in 2010. Hay Group’s survey also shows a parity of planned
salary increases for healthcare employees in 2011 with both executives
and all employee groups seeing a 2.6 percent increase.

“With executive salary budgets rising at the same level as staff this
year, it’s clear that boards are concerned about public perception of
executive pay,” said Seifert. “However, it’s critical that compensation
committees balance their concern of scrutiny with their need to attract
and retain the best possible talent to lead their organizations.”

Salary increases for physicians are still lagging slightly at 2.3
percent, while nursing will see a 2.7 percent salary increase in 2011.
High performers/potentials will see less than 1 percent more than all
employees with 2.8 percent planned base salary increases for 2011.

“With limited budgets, healthcare organizations are still resistant to
differentiate pay for top and average performers,” said Seifert.
“However, if healthcare organizations want to retain high performers and
high potentials, they need to treat them fairly – which does not always
mean that everyone gets the same amount.”

About the survey

Hay Group’s forecast results are based on the latest data available from
Hay Group’s U.S. database, provided by more than 486 U.S. organizations
in November 2010 in the general industry survey, and 90 hospitals and
health systems of varying size, structures and locations participating
in the healthcare salary survey. Typical respondents to the survey
include compensation professionals in the Human Resources departments.
Hay Group’s core compensation database represents compensation practices
for almost 3,000 companies and over 6 million employees.

About Hay Group

Hay Group is a global consulting firm that works with leaders to
transform strategy into reality. We develop talent, organize people to
be more effective, and motivate them to perform at their best. With 86
offices in 48 countries, we work with more than 7,000 clients around the
world. Our clients are from private, public, and not-for-profit sectors,
across every major industry and represent diverse business challenges.
For more than 60 years, we have been renowned for the quality of our
research and the intellectual rigor of our work. We transform research
into actionable insights. We give our clients breakthrough perspectives
on their organization and we do it in the most efficient way to achieve
the desired results. Our focus is on making change happen and helping
people and organizations realize their potential.

For more information on Hay Group’s healthcare practice, services or
this study, please contact Colin Owens at Healthcare.US@haygroup.com
or 800-776-0486.